2018 (9) TMI 979 - AT - Central Excise

Method of Valuation - lagging sheets - manufactured goods cleared to various branches, used in servicing as well as sold to customers - whether the assessable value of the lagging sheets cleared by appellant to their branches/depots for executing various contracts needs to be valued as per the provisions of Rule 7 or Rule 8 of the valuation rules? Held that - The issue in respect of valuation of the lagging sheets cleared to depots/branches of the appellant now stands settled in their favour by Apex Court s decision in TEJO ENGINEERING SERVICES PVT. LTD. VERSUS COMMISSIONER OF C. EX., CHENNAI-II 2005 (3) TMI 374 - CESTAT, CHENNAI , where it is held that valuation of lagging sheets needs to be done as per Rule 8 of Valuation Rules. Appeal allowed - decided in favor of assessee.

Summary

Issues:
1. Applicability of Rule 7 or Rule 8 of the Valuation Rules for determining the assessable value of goods cleared by the appellant to their branches/depots for executing service contracts.

Analysis:
The judgment pertains to appeals regarding the assessable value of lagging sheets cleared by the appellant for service contracts. The appellant paid duty based on the cost of production plus a percentage as per Rule 8 of the Valuation Rules. Revenue authorities contended that Rule 8 does not apply as the sheets were not sold or consumed for production. The first appellate authority upheld the demand based on Rule 7. The issue was previously decided in the appellant's favor by the Tribunal in an earlier order, which was subsequently upheld by the Apex Court. The Bench accepted that the value should be determined as per CAS-4 under Rule 8. The first appellate authority failed to consider this earlier decision, leading to the appeals.

The Tribunal highlighted that the issue had already been settled in a previous order, where it was held that the value should be determined in terms of CAS-4 under Rule 8. The Bench emphasized the importance of CAS-4 certificates for determining the assessable value. The Tribunal noted that the first appellate authority did not consider this earlier decision, which was upheld by the Apex Court. The Apex Court's decision reaffirmed that the valuation should be done as per Rule 8 of the Valuation Rules. Consequently, the appeals filed by the appellant were allowed, and those filed by the revenue were rejected based on the settled issue.

The judgment underscores the importance of consistency in applying valuation rules and the significance of earlier decisions in subsequent proceedings. It clarifies the correct method for determining the assessable value of goods cleared for service contracts, emphasizing compliance with CAS-4 under Rule 8 of the Valuation Rules. The Tribunal's reliance on its previous decision, upheld by the Apex Court, highlights the binding nature of settled legal principles in similar cases. The judgment ultimately upholds the appellant's position based on established legal interpretations and precedents, providing clarity on the valuation methodology for excisable goods in such scenarios.